What's so great about the Small Business Administration? Pretty much everything. You always knew it was a source of loans when banks turned you away. But beyond that, the SBA's significant role in supporting small and startup businesses makes it an important driver of the U.S. economy.
The people at SmartBiz, an online lender for SBA-backed loans, have created an infographic that provides some great perspective on what the SBA does and the effect it creates. Here are some reasons we should all love the SBA--and every small business owner and entrepreneur should consider applying for an SBA loan before turning to a traditional bank:
1. It's loaned more than $20 billion so far this year.
With numbers like those, it's easy to see why the SBA has a real effect on the economy.
2. It's lending to more and more businesses.
The SBA has provided loans to 45,000 small businesses so far this year. That's a 25 percent increase over the same time last year.
3. It contributed to creating 2 million small-business jobs.
That's the total number of jobs created by small businesses last year. Some of these new jobs were the result of SBA loans that allowed those businesses to expand, move into new markets, and hire more help.
4. Small businesses are big news for our economy.
More than half the nation's work force work at small businesses. And that number will only grow, with small businesses creating two out of every three new jobs.
5. It costs the taxpayers nothing.
The SBA funds its own operations from the guarantee fee it collects from borrowers when assisting them with a loan.
6. It makes wise lending decisions.
Through July of this year, only 1.16 percent of regular SBA loans were charge-offs.
7. It says yes when banks say no.
Eighty percent of small business owners have been turned down for loans by traditional banks. Without the SBA, those businesses might have been forced to sell or close down.
8. It's a much better deal than alternative lenders.
Alternative financing providers do provide credit when traditional banks won't. But that credit often comes at much higher interest or disadvantageous terms. The SBA offers a lower APR than most such lenders, making it easier for small businesses to pay back those loans.
9. There's still more than $3 billion available.
The SBA still has more than $3 billion in its congressionally mandated budget available to lend in 2015. If you need a loan, make sure to find out what the SBA has to offer before borrowing from a traditional bank or alternative lender.